Fannie Mae has launched an interactive video simulation tool to inform struggling homeowners about their options to avoid foreclosure.
"In 2011, an estimated 4 million homes will be at imminent risk of foreclosure. As we enter a new year, the company is expanding its efforts to help struggling homeowners avoid foreclosure — WaysHome is an innovative tool to help achieve this goal," said Jeff Hayward, Fannie Mae’s senior vice president, in a statement.
Site users follow actors who play three residents of a neighborhood: Richard Lane, who is delinquent on his mortgage and thinking about leaving his home; Jackie Williams who is struggling to keep up with her mortgage payments; and Miguel Gonzalez, who is underwater and thinking about refinancing. Users help them make decisions, and immediately see the consequences of those decisions.
To start, users can either choose a character or take a quiz to figure out which character’s story is most relevant to them. The quiz asks whether users are behind on their mortgage payments or have been late with a payment, whether a short- or long-term situation is causing the problem, and whether they want to stay in their home. The tool does not record answers and users can click back and forth to make different choices at any time.
"When you think about what people are dealing with today, they are either currently paying their mortgage but are at risk of defaulting, or they have defaulted on their mortgage but are trying to figure out what their options are, or they are on the verge of foreclosure. When you are in those types of stressful situations, the way you make financial decisions is very different from the way you would if you were calm," said Meg Simeone, Fannie Mae’s vice president of marketing in an introductory video.
The tool helps homeowners take the time to understand their options in the privacy of their own home and "then when they talk to their lending partner they know what they’re dealing with," she said.
Once users choose a character, they hear that character’s story, the tool asks what decision the user would make if confronted with the same situation and the video plays out the scenario. Richard Lane’s choices, for example, are: 1. Keep trying to pay; 2. Stop trying to pay and wait until they foreclose; 3. Get it over with — pack up and move, leave the key in the mailbox; and 4. Try to talk to your mortgage company.
"The unique thing about the film is that they can see the consequences of the actions that they make," Simeone said.
Along the way, Fannie Mae provides tips, such as staying away from scams, and links to free housing counseling services. Ultimately, users learn how they might be able to stay in their home, or at least avoid foreclosure through alternatives such as repayment plans, forbearances, loan modifications, deeds-in-lieu of foreclosure, and short sales.
"It’s a travesty when people lose their homes because they don’t know or understand their options. Homeowners who are proactive about working with their mortgage company, housing counselors, or using consumer tools like WaysHome have a significantly better chance of finding a solution that allows them to avoid foreclosure," Hayward said.